With a full first quarter behind us, we’re seeing improvements over last year, one of the slowest moving real estate markets in years. And, as always, we'll take a look at where the market’s been, where it’s at, and where it appears to be headed for the rest of 2024. Where We’re At | Local Housing Market (Denver & The Front Range) Local Market Insights: Easter Seasonality and Inventory Trends As Easter approached, a predictable softening in buyer engagement was observed, mirroring patterns from previous years. With families opting to spend time together, showings dipped slightly, impacting the number of homes going under contract. This seasonal adjustment serves as a reminder of the importance of aligning strategies with the natural ebb and flow of buyer behavior. Inventory Insights: Expanding Choices On a positive note, the landscape of available listings is widening, providing an influx of options for eager buyers awaiting their perfect match in the market. This expansion signals a healthier market environment that caters to diverse preferences and needs. Both new listings and pending transactions have seen adjustments, reflecting a delicate balance between homes entering the market and those securing contracts. Navigating these shifting tides effectively requires staying agile and well-informed. Market Momentum: Showings and Sales Trends Despite a decrease in showings, the quality of buyer interest remained notably high, with those venturing out during the holiday period demonstrating a genuine intent to purchase. This emphasizes the importance of prioritizing engagement quality over sheer quantity. Strategic pricing of listings continues to be pivotal, influencing the speed at which homes are snapped up and the adjustments sellers are willing to make to attract the right buyer. Key Market Metrics: Median Close Price: $595,000, marking a 3.5% increase month-over-month. Supply in Months: 1.67, down by 13/0.47 month-over-month. Median Days in MLS: 11 days, down by 52% month-over-month. Pending Sales: Up nearly 32% month-over-month. New Listings: Up over 16% month-over-month. Total Showings: 13,378, showing a slight decline of 12.1% week-over-week. However, it's important to note that achieving market balance, typically indicated by a six-month supply, would require a significant increase in total listings. This suggests that the market is currently operating below the desired level. Additionally, according to a recent study by Corelogic, Denver ranked in the top 10 (#9) for home price changes in February, experiencing a 3.2% increase compared to 2023. Miami saw the highest gain at 10.2% year over year, highlighting dynamic shifts in housing markets across different regions. Where We’ve Been | National Housing Home prices nationwide, including distressed sales, increased year over year by 5.5% in February 2024 compared with February 2023. Chief Economist for CoreLogic, Dr. Selma Hepp, said: “Home price growth pivoted in February, as the impact of the January 2023 Home Price Index bottom finally faded. As a result, the U.S. should begin to see slowing annual home price gains moving forward. Nevertheless, with a 0.7% increase from January to February 2024, which is almost double the monthly increase recorded before the pandemic, spring home price gains are already off to a strong start despite continued mortgage rate volatility. That said, more inventory finally coming to market will likely translate to more options for buyers and fewer bidding wars, which typically keeps outsized price growth in check. Still, despite affordability challenges, homebuyer demand appears to favor already expensive, coastal markets with a limited availability of properties for sale.”  Where We’re Headed | Spring Housing Market Forecast Altos data shows we only need stability in mortgage rates for a rebound in home sales. You may know that home sales have been slowish for the past 18 months or so. As mortgage rates began rising starting in 2022, payment affordability got dramatically worse and homebuyer demand slowed. At the same time, seller volume dried up. But now sellers are coming back into the market. New listing volume last week was 18% more than a year ago. Total available inventory is gradually climbing about 1% per week — last year it was still declining in April. As we roll into the second quarter, we should have accelerating inventory growth each week. The Economy’s Impact on the National Real Estate Market In a recent assessment of the job market and its implications for the real estate sector, Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), offers valuable insights into the current economic landscape and its potential impact on housing trends: "The job market continues to exhibit solid strength, with 303,000 net payroll job additions in March. That brings total job creation to 5.8 million from the pre-COVID peak four years ago. The construction industry added 39,000 net new jobs, up by 600,000 from four years ago. Therefore, more housing supply is on the way in future months. More jobs mean more potential housing demand in the future. But more jobs also mean the interest rate decline could stall as the Federal Reserve re-evaluates inflation risk. Wage growth was 4.1% in March after two straight years of above 5% gains. This decelerating wage growth can lessen consumer price inflation. Overall, mortgage rates are likely to remain unchanged, with no further measurable declines in upcoming months. High budget deficits will also hinder interest rates from falling as government borrowing crowds out mortgage funding availability. Even so, multiple offers on properties are still happening. Homeowners with record-high housing wealth should understand the current favorable environment for putting homes on the market." Economist Who’s Buying? | Millennials Take the Lead in Home Buying The housing market is experiencing a significant shift in demographics, with millennials emerging as the largest group of home buyers, according to the latest report from the National Association of Realtors® (NAR). The 2024 Home Buyers and Sellers Generational Trends report reveals that millennials, spanning both younger (ages 25 to 33) and older (ages 34 to 43) segments, now constitute a combined 38% of the home buying market, up from 28% last year. In contrast, baby boomers' share has decreased from 39% to 31%, relinquishing their position as the largest demographic of home buyers. Dr. Jessica Lautz, NAR deputy chief economist, attributes this shift to younger millennials entering homeownership for the first time and older millennials transitioning to larger homes to accommodate their changing needs. The report also highlights a rise in first-time buyers across generations, with younger millennials leading the charge. Additionally, the emergence of Generation Z (ages 18-24) in the housing market demonstrates diversity and independence, with a notable proportion of single female purchasers. Despite these changing buyer trends, baby boomers remain the largest home-selling generation, accounting for 45% of all sellers in 2023. The report also reveals variations in homeownership tenure among different generations, with older millennials typically selling their homes after just six years, compared to Gen X, baby boomers, and the Silent Generation, who typically stay in their homes for 15 years. The enduring appeal of homeownership is evident, with 82% of all buyers considering it a good financial investment, particularly younger millennials, 86% of whom share this positive outlook. Regardless of generation, the report indicates that buyers and sellers alike value the expertise and guidance provided by real estate agents, highlighting the essential role they play in realizing homeownership dreams. NAR President Kevin Sears emphasizes the universal value of owning a home, serving as a cornerstone for personal prosperity and community development. As market dynamics evolve, the reliance on real estate agents for expertise and guidance remains steadfast, underscoring the invaluable service they provide in facilitating homeownership. Bottom Line The local housing market on the Denver & Front Range experienced seasonal fluctuations as Easter approached, with a slight dip in buyer engagement. However, this was coupled with a positive expansion in inventory, offering more choices for buyers. Despite a decrease in showings, the quality of buyer interest remained high, emphasizing the importance of focusing on engagement quality over quantity. Key market metrics show promising trends, including a median close price increase and a significant uptick in pending sales and new listings. And now it’s also clear just exactly who is buying up the new inventory in 2024.

I saw a post today that said “it’s always sunny in the Bahamas.” That’s probably mostly true. It’s often sunny here too, isn’t it? That’s what we love about Colorado. Yesterday, for instance, was beautiful. A great day for a walk. A nice day to get some sunshine and vitamin D infusion on the skin. Today is kinda February-like though isn’t it? I literally saw real estate for sale signs going in yards yesterday (a sign spring could be right around the corner) but a day like today reminds us that spring is officially still a month away.  There are signs of inventory picking up though.  The latest report from the Denver Metro Association of Realtors (DMAR) indicates that there are currently 4,871 attached and detached homes available in the entire Denver Metro area. This shows a significant increase (18.23%), in available properties, from January 2023—good news for homebuyers. And while mortgage rates have been up and down this week, homebuyer sentiment appears to be on the rise while NAHB (National Association of HomeBuilders) metric for measuring their confidence also rose 4% to its highest level since August of last year.  So how’s the market? The era of multiple-offer madness has simmered down from the fever pitch we experienced a few years ago, and yet about 20% of homes sold still have sellers celebrating selling at a price over list price. Agents are still helping buyers find inventive ways to lower interest rates, such as the 3-2-1 or the 2-1 rate buydown, and other concessions (ask us how).  Today’s homebuyers don’t seem deterred about rates trending back up a bit as they have been lately (yet),  “[The] Consumer Sentiment indicator this morning rose to a 31-month high on a strong job market. Inflation is still on a downward trajectory.  Remember, never does anything move in a straight line. Experts are expecting a lower inflation report next month and a return to the mid-6s by spring, officially starting in 7 weeks, with a gradual decline to 6.2% by year-end.” For those of you hoping for drastically lower rates to make your move, I recommend patience. The reality is no one knows when rates will move. There’s only what we know presently.  Meanwhile, affordability remains in the same range we’ve been seeing in the Denver Metro area. The median sales price is $565,000 this month. Whereas last month, the median sales price was $15,000 lower, near $550,000, but $25,000 higher than January 2023, which was $539,250. Bottom Line In the meantime, if you or someone you know is considering a move in town, out of town, downtown, or even in or to another state, I can help (yes, in other states). Let’s schedule a conversation.   

With the new year already a month in, we’re already seeing exciting developments in the real estate market. And, in this update, we'll take a look at where the market’s been, where it’s at, and where it appears to be headed in 2024. Where We’ve Been | National Housing Reflecting on 2023, we drew a comparison to the conditions in 1995. Why? Existing-home sales hit a record low of 4.09 million in 2023, mirroring the 3.85 million recorded in 1995. However, the main difference in this comparison is that the U.S. population has grown from 266.6 million (1995) to 336.0 million (2023), contributing to challenges in inventory and affordability. Back in 1995, there were 1.58 million single-family homes available for purchase. In December 2023, this number dropped to 870,000, and the months' supply decreased from 4.8 to 3.1 months. Again, considering our substantial difference in population, you can see how available housing inventory would influence affordability, mirroring a typical supply-demand model.  Affordability concerns were underscored by the median home sales price, soaring from $114,600 in 1995 to a historical high of $389,800 in 2023. Despite a difference in mortgage interest rates, a difference from 7.93% in 1993 to 6.81% in 2023, housing affordability indices, qualifying incomes, and mortgage payment percentages underwent significant shifts. First-time homebuyers faced increased challenges, with their share of the market dropping from 42% in 1995 to 32% in 2023, and the age of first-time buyers rising from 31 to 35 years. Despite these challenges, there is hope for 2024. Mortgage interest rates are on the decline, buyers are entering the market, and new housing construction is helping to increase available inventory. If these trends persist, we anticipate a more positive outcome for the housing market this year. Where We’re At | Local Housing Market (Denver & The Front Range) In the metro Denver real estate market, a notable shift in the relationship between supply and demand is evident as well. New listings increased by 15.2% week over week, and pending transactions surged by 20.7%. The Odds of Selling increased by 4.2% to 53.0%, indicating a positive trend. To achieve balance, we would need 23,177 total listings, putting us at 19.9% of balance. Showings increased by 14.5%, with a median of 21 days on the market. Rates Rates Drop Significantly on “Fed Day”, but Not Because of The Fed The Fed met on January 31st, and rates experienced a notable drop, though the drop is not solely attributed to The Fed’s actions. Economic data and headlines about banking troubles contributed to this shift. While additional gains depend on incoming economic data, things just improved for potential homebuyers who are rate sensitive. Where We’re Headed | What Local Lenders are Saying Local lenders are noting unexpected increases in client introductions, pre-approvals, and applications, indicating a potentially busy spring market. Now sure looks like an opportune time to ensure a strong pre-approval, understand the next steps, and prepare for competitive market conditions…or get out ahead of them. One of our local lender associates wrote,  "If January is any indication of what’s to come in the Spring Market, then HELLO FEBRUARY! I experienced an unexpected increase in client introductions, pre-approvals, and applications this past month that was very welcome but not typical for this time of year. This tells me that we are in for a busy spring, which means NOW is the time to prepare. Anyone considering, talking about, or looking to buy this year should reach out to ensure that they have the strongest pre-approval possible and that they understand and are comfortable with the next steps. I focus on informing clients through communicating and listening to make sure they are as comfortable and ready when the time is right. If you know anyone who would like to be informed, listened to, taken care of, and prepared to successfully close on a new home in this competitive market, please send them my way." Bottom Line When navigating the real estate landscape, it is always crucial to stay informed and prepared. If you have any questions or need assistance, we encourage you to reach out. There’s no sense in wondering and wandering on your own.

That’s a Wrap on 2023! This year was marked by low home value appreciation and slower than normal real estate transaction activity, and staggering high mortgage rates. In October, we actually saw homes trade at a slower rate than they did during the Great Recession. But November brought relief, and rates fell for about 6 straight weeks, then stabilized the last two weeks of the year to round out an interesting year in the real estate market. Mortgage Rates Wednesday, in fact, was the most interesting day of the past 2 weeks, but that's not saying much. The past 2 weeks have been the calmest for mortgage rates in more than a year with the average lender essentially unchanged since December 14th. Yesterday's excitement came in the form of a more normal level of volatility. It didn't hurt that the volatility happened to be in the direction of lower rates. With that moderate improvement, the average lender was still lending just barely at the lowest levels since May 2023.  The Impact of Rates on Affordability Deputy Chief Economist & Vice President of National Association of Realtors (NAR) Research, Jessica Lautz said, “In just 6 weeks of decline, this makes a considerable difference for a home buyer purchasing a $400,000 home. A monthly mortgage payment of $2,135 is a monthly savings of $166. This is considerable, and buyers who have been priced out may start to trickle back in. For homebuyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market. It should be noted that in the most recent months' data in the REALTORS® Confidence Index, 29% of the market is purchasing a home without the use of a mortgage. These buyers are likely indifferent to the mortgage market. Some are investors, but many are primary residence buyers who have built substantial housing equity amid home price gains. While some of these buyers may be local, others may be moving long distances to a more affordable area. For now, eyes are on the Feds statements, CPI, and the 10-year treasury to see what the end of the year holds for mortgage interest rates. For those interested join NAR's Real Estate Forecast Summit on Dec 12 for a more in-depth forecast.” Existing Home Sales In November, the housing market witnessed a turnaround as existing home sales, which had experienced a downward trend for the past five months, increased by almost 1% compared to the previous month, reaching an annualized rate of 3.82 million units. It's worth noting that these sales figures only partially capture the significant decline in mortgage rates over the last two months, suggesting the likelihood of even more robust numbers in the upcoming months. The national median sales price for November stood at $388,000, reflecting a 4% year-over-year increase, according to NAR. Compared to Last Year This time last year there was a significant decline in mortgage rates as well. Between late October 2022 and early February 2023, the average 30-year mortgage rates decreased by approximately 1.3% (130 basis points). This reduction played a crucial role in the impressive 14% month-over-month improvement observed in existing home sales in February 2023. “Interestingly, the decline in mortgage rates this year has been more substantial (1.5% or 150 basis points) and quicker (within a span of 2 months) compared to the previous year. According to Matthew Graham of Mortgage News Daily, it has been labeled as "the biggest drop in a 45-day window that we've ever measured."” NAR’s Chief Economist, Lawrence Yun seems to agree: “The latest weakness in existing home sales still reflects the buyer bidding process in most of October when mortgage rates were at a two-decade high before the actual closings in November. A marked turn [upward] can be expected as mortgage rates have plunged in recent weeks.” What he means is that the majority of the home sales that closed in November went under contract in October, when rates were much higher. (It generally takes 1.0–1.5 months for a deal to close.) New Home Construction It’s been said that new construction will lead us (the US housing market) out of the inventory shortages and into affordability. While that may take some time, several years at least, it’s good to see new home starts, new home builder confidence, and overall site traffic all up in recent months: “With mortgage rates down roughly 50 basis points over the past month, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look. With the nation facing a considerable housing shortage, boosting new home production is the best way to ease the affordability crisis, expand housing inventory and lower inflation.” — Alicia Huey, NAHB Chairman End of a Season? Winter just began but the year is concluding and the stale real estate market season may be as well. First-time buyers traditionally fare better in the winter, as there is less competition from families in the home-buying market. But as the year comes to an end, it’s quite possible that so too are the best opportunities. Following interest rates’ high water mark in October, market fatigue became widespread amongst most sellers and buyers. However, for those who remained in the market, enduring the slowdown in showing and listing activity, there were opportunities for buyers to negotiate with bedraggled sellers. Now with Christmas nearly a week behind us and mightily improved rates since the end of October, there are already signs of the market picking up steam heading into the turn of the new year. Bottom Line Homebuyers who’ve been priced out in the last year should find optimism through decreased interest rates in 2024. As for sellers, prices are predicted to moderate with most experts predicting a modest 2-4% increase in value, though some are calling for as much as 5+% if interest rates dip too low too quickly. Either way, it should be interesting. Give us a call to discuss how today's market conditions impact you.   If you’d like to read further on what 2024’s real estate market may hold, we’ve curated a short list of articles we think you may want to read before the new year ramps up next week: Home Sales Start to Rise Building Momentum for 2024 NAR Forecasts 4.71 Million Existing-Home Sales, Improved Outlook for Home Buyers in 2024

Seizing the Opportunity: Why Now Might Be the Perfect Time for Your Real Estate Move __________ Something big occurred just yesterday in the housing world--one of the biggest 2-day drops in interest rates we've seen in decades! On Wednesday, the Federal Reserve met and Chairman Jerome Powell spoke at the last Federal Open Market Committee (FOMC) meeting of the year. Ultimately, the Fed signaled that additional rate hikes in the near term are not expected and unlikely and alluded to a potential for 3 rate decreases throughout the coming year. While the Federal Reserve doesn't directly establish mortgage rates, these rates align with market expectations influenced by the Fed's decisions on short-term rates. The positive expectations evident in the Fed's Wednesday projections further emphasize this correlation. The bond market, of course, loved the news, and traders began pricing The Fed's anticipated actions and dovish tone into the interest rates. The result was that the prevailing rate dropped to the lowest we've seen since May 2023, making up for a lot of lost ground along the way. Mike Fratantoni, Chief Economist of the Mortgage Bankers Association said:  “Additional rate hikes no longer appear to be part of the conversation. It is all about the pace of cuts from here. This is good news for the housing and mortgage markets. We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market. We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations, following an extraordinarily slow 2023.” What does this mean for housing, and for you? Housing professionals expect further declines in mortgage rates and busier 2024 market. And it stands to reason. If you're considering buying a home, you can expect rates to likely move lower (more affordable). Since rates hit their recent peak of over 8%, homebuyers have gained hundreds of dollars in savings per month on mortgage payments due to the improved rates. In this video, released just this morning on YouTube, Brian Dewald, a local lending partner, spoke of a veteran family he helped close on a deal with a 30-year fixed rate of just 6.25%. Homebuyers currently in the market are finding that they're able to reach new thresholds of affordability or have homes, otherwise thought to be out of their price range, come back into focus for consideration. An Encouraging Winter Market  Since Thanksgiving, the mortgage industry has experienced a significant uptick in business, driven by homebuyers seizing the opportunity presented by lower rates. Concurrently, there has been a modest increase in new listing activity in recent weeks, providing additional choices for prospective homebuyers. In the current market, approximately two-thirds of existing mortgages still boast rates below 4%, and more than 90% have rates below 6%. This dynamic hampers inventory growth as homeowners are hesitant to part with their advantageous low-rate mortgages. However, a shift is anticipated in 2024, as noted by Lisa Sturtevant, Chief Economist at Bright MLS. Life changes, whether familial or financial, are expected to compel more homeowners to sell, even if it means relinquishing their favorable, much-lower rates. "With falling rates and heightened new listing activity, it is anticipated that the unusually busy December market will extend into January, as both buyers and sellers strive to gain an edge before the spring market," remarked Sturtevant in a recent statement. Cautiously Optimistic With moves this big, there is a risk of a corrective bounce. And progress will not be linear–2024 will continue to bring periods of ups and downs. Economically, despite strong retail sales and NY Fed Pres Williams’ attempt to squash the exuberance this morning, continued optimism prevails with the 10-yr dropping to 3.9% and the 30-yr fixed to 6.625%. Bottom Line Real estate decisions often take time to unfold. Yet, when a promising opportunity arises, it's advisable for prospective homebuyers to act promptly. These moments of advantage and opportunity in the real estate game can be brief, and seizing them could prove beneficial long-term.

The latest housing news for November 2023. In our professional opinion, here's what you need to know about today's real estate market conditions--despite what you may have heard: Mortgage Rates and Market Trends In a surprising turn of events, traders are not currently pricing in another rate hike for the first time in two years! Yesterday, we saw RATES at their LOWEST POINT in 3 months. The 10-year treasury's fall from 5% to 4.4% adds weight to the expectation of a downward trend in mortgage rates. So far in November the market has already experienced about a half to one percentage drop in mortgage interest rates. It’s difficult to forecast if this dip represents a long-term trend at this time, but homebuyers should welcome the improvement.This could make late fall and early winter an opportune time for home shopping before rates potentially fall into the 6% range, as they did yesterday. The market moves quickly and some of those gains evaporated today, but that’s the market. If rates were to dip into the 6s in the spring, there’s a good chance for a frenzy of new homebuyers entering the market, driving up competition for the already low supply of available homes to buy. Federal Reserve and Market Dynamics Despite conflicting signals, the market largely believes the Fed is done tightening monetary policy. Recent data on the consumer price index (CPI) sparked a major rally on Wall Street, with traders almost completely taking potential Fed rate hikes off the table. The flat reading on the headline CPI, along with a decrease in energy prices, contributed to this sentiment. Local Market Conditions The local market conditions provide interesting insights. With over 50% of units under contract experiencing price reductions and motivated sellers willing to negotiate, repair, and offer concessions, 2023 stands out as a year where sellers are driven by necessity. Traditional seasonal patterns indicate a rise in homes being withdrawn or expired from the market in the fourth quarter, setting the stage for likely increased demand and multiple offers in the first quarter of the following year. Market Trends and Insights Zillow's October Housing Report highlights a national trend of falling home prices month-over-month due to high mortgage rates and the usual seasonal housing cooldown. However, year-over-year, home values are still up in 34 of the 50 largest markets. Prices increased only slightly nationwide in October but the month’s hottest markets saw more substantial price growth due to high demand. Unfortunately, none of the Front Range’s largest cities made it onto the latest list (October 2023) of Top 20 Hottest Housing Markets or Markets Seeing the Largest Jump in Rankings (October 2023), though many of our neighbors in the West did (per realtor.com). Expert Predictions Expert predictions suggest a rebound in home sales in 2024, with Lawrence Yun, NAR Chief Economist, stating, "Existing home sales will rise by 15% next year." The market's expectation for the path of the federal funds rate has shifted, with potential rate cuts in 2024. Yun’s prediction for home sales is not to be confused with home values, though most experts expect that prices will increase next year, with most agreeing on a relatively modest increase. Bottom Line In conclusion, 2023 presents both challenges and opportunities in the real estate market. Understanding these trends is crucial for making informed decisions. Your reflection on the significance of data-driven facts will not only benefit your clients but also contribute to the overall health and stability of our market.   Remember there are always opportunities and advantages in any market, so please always feel free to reach out if you have any questions or if you're ready to explore the exciting opportunities in the current real estate landscape.

The latest housing news for October 2023. In our professional opinion, here's what you need to know about today's real estate market conditions--despite what you may have heard: Mortgage Rates at 8% Mortgage rates have reached 8%, a level not seen in 23 years. While this might be concerning, it's important to note that we've been hovering in the high 7% range recently. The big question on everyone's mind is when will rates start decreasing according to the experts? Many of the local lenders I work with and associate with seem to think that rates are nearing their top. The Federal Reserve, the monetary entity behind all the recent rate hikes wants spending to stop before they slow down rate hikes.  What's the Outlook? Fortunately, there is hope for relief in the near future. The latest inflation data suggests that the Federal Reserve's interest rate hikes may be working to combat inflation, which is a positive sign. However, the Fed is not expected to increase the interest rate at the next meeting. The reality is, when trillions are pumped into the system, inflation goes through the roof. Market Dynamics New listings have dropped by 6%, while inventory has increased by 11% to 6,629 listings. We're beginning to see inventory build--inventory currently stands at about 2.4 months of available supply. Notably, the median price continues to climb slightly (up 0.86% year over year), and the close to list price ratio remains strong at around 99%. Many sellers are still achieving their desired prices, with noted concessions, but buyers are becoming more assertive and winning negotiations. The 5 D's Yeah but are people still moving? The “5 D's”--those moving out of necessity--is a significant driver of the housing market. While prices haven't dropped significantly yet, increased rates have decreased demand, potentially impacting prices. However, low inventory is a complicating factor in this equation which is currently underpinning values, keeping them from substantially decreasing. We're closely monitoring the situation as inventory is finally increasing…slowly. Ownership and Foreclosures What's keeping the market going? Currently, 38% of homes in the U.S. are owned without mortgages, while 62% have mortgages. Importantly, 90% of those with mortgages have rates under 6%, and 80% have rates under 5%. Foreclosures have increased by 34%…but they're coming up from historic lows. The situation is not as extreme as it may seem. National foreclosure rates are at 3%, but in Colorado, they're just 1.7% and forbearances are becoming a thing of the past. Don't let the news tell scare you into thinking the worst, without knowing these facts. Strong Foundational Market Elements  Further expounding on the comments above, the market is supported by a substantial $31 trillion in home equity. Most homeowners have an average of 71% equity, and many have seen their equity grow by 45% in the post-pandemic boom. These facts provide stability and opportunities in our market, despite the current volatility in mortgage rates and perceived tenuous nature of the market. Seasonal Opportunities We are currently experiencing the traditional seasonal slowdown in the market. In some ways, seeing seasonality in the marketplace is welcome because it’s been predictable in the past (pre-pandemic), and always has presented opportunity for homebuyers.   For today's buyers there is also opportunity. Although there's less inventory of homes from which to choose, there are also fewer buyers to compete with. Historically, we've seen deals and negotiations pick up during this season.    For sellers, we advise pricing properties reasonably and ensuring they're in tip-top shape for listing. Sellers should anticipate that while price reductions aren't always expected, when a property is priced correctly, most buyers who are getting loans will need a mortgage rate buydown (also known as a seller subsidy) to make the montly payment work in today's near-8-percent mortgage rate environment. For more information on mortgage rate buydowns click here. The Silver Lining Despite hitting 8% last week, mortgage rates dropped ever so slightly back into the high 7's recently. That's not much, admittedly, and many buyers are waiting for a more substantial drop, but this may prove costly in the long run. Lower rates are expected to attract more buyers and potentially drive up home prices. An estimated 5.5 million prospective buyers could enter the market if the rates fell by a percent and double that number if rates fell by 2 percentage points. Competition would be beyond fierce if those numbers came to fruition, and if that happens, you've seen what happens to prices. Not to mention, the winter season typically brings more concessions and price drops, making it an excellent time for buyers to make a move in the current market. Ask us how you can get pre-approved with one of our preffered lenders. Whos' Buying? In the current market, three prevalent groups are cash buyers, first-time buyers, and circumstantial buyers and sellers (e.g., due to death, divorce, job changes). Cash buyers are not as affected by rising rates, seeing this as an opportunity. First-time buyers recognize the power of real estate as an investment and hedge against inflation. Life circumstances and investors continue to drive transactions. Ignoring the Noise Amidst the ongoing chatter about rising mortgage rates, it's essential to remember that predictions have often been wrong this year. Pay attention to time in the market rather than trying to time the market. Seek advice from trustworthy individuals with real experiences. Real estate and the stock market have historically been wealth-building assets over time. Quite honestly, if you look at who's positioning themselves in this market, its the investors who are still actively seeking opportunities. So you might ask yourself, what do they know that keeps them buying in today's market that I don't know? Bottom Line While the market is facing rising mortgage rates, there's always someone finding opportunities. We're here to guide you through these market conditions so you can confidently make informed decisions.    Please don't hesitate to reach out with any questions or for personalized advice--that's precisely why we're here.